BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Pharmaceutical Sector Of Hong Kong

Hong Kong boasts a small but advanced pharmaceutical sector, which holds modest longer-term potential when compared to other Asian markets. The main drivers of future growth include an ageing population, rising demand for novel treatments, a potential influx of patients from mainland China as well as local investment by foreign companies. At present, prescription medicines remain dominant, at 75% of total sales.

A key driver in the expansion of the self-medication sector is the government’s plans to allow private pharmacies to establish outlets at hospitals. Doctors and pharmacists have opposed the scheme, which they argue will result in the big pharmacy chains dominating the market, resulting in higher drug prices for patients. However, the government says that the new pharmacies will be required to price their products in line with market rates. The move forms part of an overall government strategy to reduce public health expenditure, by shifting the burden to the private sector. This includes encouraging the development of the over-the-counter (OTC) sector, which currently accounts for less than 25% of the total market.

BMI predicts a modest growth of around 6% in 2006, with the market exceeding US$0.93bn by 2010. Prescription medicines are likely to be the fastest growing segment, reaching US$0.7 in 2010 from US$0.54bn in 2005. Demographic changes will particularly boost the use of novel drugs for cardiovascular, neurological, cancer and antiviral indications that are not treated effectively by currently available therapies, as well as for new versions of existing prescription antihistamines, analgesics, antifungal agents, cholesterol reducers and acid reducers.

In regional terms, Hong Kong will lag behind a number of its neighbours, not just the more advanced markets such as Japan, but also its more immediate neighbours, such as South Korea and Singapore. The reasons behind this include the lack of local research and development (R&D and the unsettled political climate in relation to mainland China. BMI’s adjusted Business Environment Rankings for Asia put Hong Kong in seventh place out of the 14 countries surveyed. This is primarily due to low growth forecasts, although on a positive note the territory remains a leading location for foreign direct investment (FDI). However, BMI cautions that the majority of this FDI is earmarked for China and is routed through Hong Kong in order to take advantage of the city’s specialist expertise and local knowledge.

Contents

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Chapter 1 - Executive Summary

Hong Kong Pharmaceuticals & Healthcare Industry SWOT

Hong-Kong Political SWOT

Hong-Kong Economic SWOT

Hong-Kong Business Environment SWOT

Chapter 2 - Hong Kong: Business Environment Ranking

Table: Asia Business Environment Rankings

Business Environment Ranking

Economics - – Long-Term Risk

Politics - – Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - Hong Kong: Market Summary

Chapter 4 - Regulatory Regime

Intellectual Property Issues

Pricing & Reimbursement Developments

Chapter 5 - Industry Trends & Developments

Healthcare Sector

Table – Secondary/Tertiary Public Sector Health Services In Hong Kong

Healthcare Financing

Pharmaceutical Industry

Traditional Chinese Medicines (TCMs)

Domestic Industry Developments

Foreign Industry Developments

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: Hong Kong Drug Market Expenditure Forecast Indicators

Key Growth Factors – Industry

Table: Hong Kong Health Expenditure Forecast Indicators

Key Growth Factors - Macroeconomic

Table: Population & Output

Prescription Market Forecast

Table: Hong Kong Prescription Drug Market Indicators

OTC Market Forecast

Table: Hong Kong OTC Market Forecast Indicators

Generic & Branded Market Forecasts

Table: Hong Kong Generics And Branded Market Forecast Indicators

Export/Import Forecasts

Table: Hong Kong Pharmaceuticals Export/Import Trends

Table: Hong Kong Hospital Data Forecasts

Chapter 7 - Competitive Landscape

Chapter 8 - Company Profiles

Leading Multinational Companies

GlaxoSmithKline

Pfizer

Merck & Co

Sanofi-Aventis

Novartis

CK Life Sciences

South Asia Pharmamedic Ltd

Vida Laboratories

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceutical Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table – Manufacturing Wages (ave per annum), US$

Table – Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 11 - Country Snapshot: Hong Kong Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Year

Competitive Landscape for Asia Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Asian Pharmaceuticals & Healthcare Sources

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BMI's Asian Pharmaceuticals Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceuticals & healthcare industry associations, chambers of commerce and company reports. Information sources include: